A year later, retailers are reporting positive results from iBeacon campaigns. There are, however, still challenges from the caveats associated with  iBeacons.

Specifically, customers must be iPhone users. They must download the retailers’ app. They must enable Wifi on their phone and opt-in to receive notifications. Many consumers are not willing to opt-in because they have privacy concerns about retailers collecting their data. Physical Cookie gives retailers and their customers the benefits of iBeacons without having to meet all of these requirements.

What is Physical Cookie?

Physical Cookie is a RFID-tag within a piece of plastic, usually on a key-fob,  which retailers can give to their customers as they shop. The customer puts Physical Cookie in their pocket and then has to take no additional steps. Electric readers are then placed around the retail store. The Physical Cookie key-fob collects data in real-time in the same way cookies on websites do (hence the name). Digital screens within the store, show customers advertisements based on their behavior. Customers do not sign up or register, so there are no privacy concerns involved. Physical Cookie has operated in the Citycenter shopping mall in Helsinki, as part of a trial since Fall 2014.

Physical Cookie is easier for the consumer to use than iBeacons. Unlike the Bluetooth technology used for iBeacons, Physical Cookie is always on. Instead of pinging a user’s phone, the actual retail environment reacts to the consumers behavior, which feels much less spammy.

The Physical Cookie Customer Loyalty Program

In the Citycenter trial, a customer loyalty program called VIP-key was launched. The VIP-keys were given to 14,000 randomly selected customers who were then automatically part of a loyalty program, without ever having to opt-in, register, or sign up for anything. The trial was in a shopping center but Physical Cookie has said this can work for both retail chains and for brands working within big-box retailers.

While this trial was conducted using Physical Cookies in a key-fob format, the company said in the future this does not necessarily have to be the case. The key-fob format was selected with the thought process that customers enter the shopping center with their wallet, mobile phone, and keys with them. The average customers wallet is already full of loyalty cards, and mobile phones would require opt-in. The key chain was chosen instead because it does not already have any smart device on it.



Results:

•     The VIP-key cost the equivalent of about two cents in US Dollars.
•     15% of the VIP-keys were active.
•     They showed a 14.5% increase in activity between floors.
•     There a was a 21.7% increase in time spent in the shopping center.

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Photo Credit: Physical Cookie

Provided by Frank Mayer & Associates, Inc.

Retailers are both optimistic and realistic about challenges heading into 2014. Either way, they should be intent on making each touch point with the customer as meaningful as possible. Here are some of the ways our thought leaders see this imperative playing out in stores.

What role does in-store merchandising play in positioning retailers for a new and challenging year ahead?

Mike Mayer, President: Our success and that of our clients going forward will come from helping marketers face a changed environment, changing consumer and rapidly evolving technology. The biggest challenge we can help our clients meet is keeping the in-store experience vibrant and relevant in the midst of upheaval.

We create solutions that keep shoppers coming into stores, help them make sense of categories, and keep them engaging with products so that in the end they appreciate the advantages of the in-store experience and are enabled to shop the way they want to.  Sometimes it isn’t the newest, shiniest technology, and sometimes it is. Fitting the right technology to the environment and the consumer leads to the best outcome.

Are there new tools that will be put to use in the realm of interactive retailing?

Ron Bowers, Senior Vice President Business Development: I’m watching to see if 2014 will usher in a new wave of in-store communication with shoppers. Proximity marketing enabled by beacon technology gives retailers a new tool to interact with connected consumers at precise locations in stores. People in retail, entertainment, transportation and other industries are paying attention to news about Apple’s iBeacon.

I’m rooting for this technology to work because from an in-store merchandising perspective, iBeacon has the potential to increase ROI and make even non-interactive displays “smarter.” A beacon could send a prompt to engage, a purchase incentive, or information.  This solution helps address the “if you build it, will they come” question that often arises when ambitious interactive merchandising solutions are used, and it could enable something as simple as knowing when and where a display gets put up.

Retailers are the real harbingers with beacon technology. If several retailers have successful tests and roll beacons out to their stores in 2014, it will add an exciting new layer of relevance to in-store communication.

This development begs the question: Have we finally reached the point of cultivating true one-to-one relationships with important customers that Peppers and Rogers espoused in their book One to One Future a decade and a half ago?

What will 2014 bring from a display design perspective?

Ryan Lepianka, Creative Director: As online shopping options become more enticing due to cost savings and ever faster shipping, brick and mortar retailers must differentiate themselves evermore from their virtual counterparts.  One aspect that really sets physical retail apart is the presence of well-crafted, hands-on experiences. A live demo allows potential purchasers to gain a tactile knowledge of products that is impossible to attain from a jpeg and a few questionable product reviews.

Heavily branded custom demo stations – for electronics and gadgetry for example – give premium products the pop they need to stand out in a crowded retail environment. They help consumers answer questions like: Does this product have the quality build I’m looking for?  Do I trust this product?

The quality of the demo station itself helps to reinforce a premium message.  These types of displays have elevated in quality of construction and features of late, and I see a continuation of this trend. More enticing lighting, less visible fasteners and more premium-looking materials are defining the preferred brands at retail today.

What worked well at retail in 2013 that we are likely to see more of in 2014?

Joe Holley, Vice President New Business Development–Displays/Merchandisers: The “less is more” trend from retailers this past year will carry into 2014.  A growing number of retailers are focusing their efforts on a detailed consumer profile for a category and only offering products – including top sellers – that fit that profile.  Omitting some SKU’s in the lineup creates opportunities to develop point of purchase displays on a higher level.

Displays and merchandisers have more real estate available to communicate to the consumer and can present a category with more style and simplicity. The “less is more” trend also opens the door for innovative ways to showcase the product as well as provide guidance to the consumer to shop the display/merchandiser with ease at the point of sale.